Research on excessive consumption of luxury goods by the “Generation Z”

Abstract

Given the inadequacy of research objects and theories on the problem of overconsumption of luxury goods by young people in academic circles. This paper applies the theory of behavioral economics to study the phenomenon of overbuying, the reasons, and the solutions to the consumption of luxury goods by Generation Z. Firstly, the consumption concept of young people in Generation Z is influenced by family background, education, and other factors, which leads to irrational purchasing behavior in luxury consumption. Secondly, behavioral economics theory is applied to explain the reasons for Generation Z’s excessive consumption of luxury goods. It is pointed out that the group effect, psychological illusion, and instant gratification drive are the reasons for the overconsumption of luxury goods. Finally, from the perspectives of Generation Z consumers, luxury goods manufacturers, and social third parties, the following solutions are proposed: strengthening education and training to promote the formation of rational consumption concepts; luxury goods manufacturers and the government taking social responsibility to provide transparent information and a healthy market environment; guiding consumers to establish reasonable consumption concepts and cultivate hobbies; formulating reasonable consumption norms and improving financial literacy to reduce the occurrence of overconsumption, and so on. The overconsumption can be minimized by formulating reasonable consumption norms, enhancing financial literacy, etc.